Speaking to The Financial Express, Chidambaram said: "Frankly speaking, I am not at all surprised at the way the stock markets have reacted. This year's budget offers hardly anything to the Indian industry, and the market indices may take a dip once the fine print of the budget proposals actually sinks in".

Explaining the initial euphoria, Chidambaram said: "Even before the budget announcements, the stock markets have been quite bullish about pharmaceutical and information technology stocks. Now that both sectors have gained handsomely from the budget, and that it offers a lot of sops for equity-based mutual funds and gives a big break to the US-64 scheme of UTI, it was quite expected that the market euphoria would intensify in the short run."

According to the architect of the "dream budget", the bull runcannot continue for long, as Yashwant Sinha's proposals for 1999-2000 leave little to be bullish about.

Incidentally, the Bombay Stock Exchange index on Thursday fell by a net of 38 points, the first reversal of sorts after the budget. In fact, after registering an intra-day's correction of over 100 points after touching a low of 3,563 the index rebounded to close above the crucial barrier of 3,600 points.

In the last three days of trading after the presentation of the Union budget on Saturday, the Sensex had been rising steadily, adding almost 400 points.

"The budget offers no stimulus to the industry, and has conveyed a very wrong signal that reforms are reversible. The new surcharge introduced by the finance minister, in fact, raises the effective tax rates," Chidambaram said.

He felt that this budget had all the ingredients to become "inflationary" as customs and excise duties, and tax rates have been hiked, directly or indirectly. "The tax and spend policy and the proposals to mop up anadditional Rs 1,000 crore through taxation, I am sure, will turn out to be inflationary."

"The low priority accorded to infrastructure projects, and the power sector in particular, sends out signals that the government is quite indifferent about the country's basic needs," Chidambaram said.

It has now become clear, said Chidambaram, that the announcements of a reduction in capital gains tax was not correct. The rate of long-term capital gains tax has been reduced from 20 per cent to 10 per cent, only if the resident assessee does not take the cost of indexation benefit.

He said that the budget, in fact, concealed the fiscal deficit figures which might actually cross 6 per cent of GDP under the old calculation. "The budget proposed a fiscal deficit of 4.4 per cent under the old GDP calculation and 4 per cent under the new series," he said.